What changed in this filing

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Item 1. Financial Statements

2022-05-04 compared with 2021-10-28 · 228 added, 494 removed, 634 unchanged (53% of the section changed)

4 unchanged sentences

dollars, except share and per share amounts)

September 30,

Current assets:

Cash and equivalents

Accounts receivable, net of allowance for credit losses of $ 20,306 and $ 19,380 at September 30, 2021 and December 31, 2020, respectively

Accounts receivable, net of allowance for credit losses of $ 19,361 and $ 18,480 at March 31, 2022 and December 31, 2021, respectively

Prepaid expenses and other current assets

24 unchanged sentences

Common shares:

260,526,784 shares issued and 260,453,918 shares outstanding at September 30, 2021;

257,164,867 shares issued and 257,096,408 shares outstanding at March 31, 2022;

260,283,158 shares issued and 260,212,496 shares outstanding at December 31, 2021

Additional paid-in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Treasury shares:

72,866 and 74,184 shares at September 30, 2021 and December 31, 2020, respectively

68,459 and 70,662 shares at March 31, 2022 and December 31, 2021, respectively

Retained earnings

6 unchanged sentences

dollars, except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating expenses:

7 unchanged sentences

Other income (expense), net

Loss on early extinguishment of debt

Income before income tax provision

7 unchanged sentences

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S.

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive income (loss), before tax:

Three Months Ended March 31,

Other comprehensive income, before tax:

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Other comprehensive income (loss), before tax

Income tax (expense) benefit related to items of other comprehensive income (loss)

Other comprehensive income (loss), net of tax

Comprehensive income (loss)

Other comprehensive income, before tax

Income tax expense related to items of other comprehensive income

Other comprehensive income, net of tax

Comprehensive income

Comprehensive loss (income) attributable to noncontrolling interests

Comprehensive income (loss) attributable to Waste Connections

Comprehensive income attributable to Waste Connections

The accompanying notes are an integral part of these condensed consolidated financial statements.

8 unchanged sentences

NONCONTROLLING

INCOME (LOSS)

Balances at December 31, 2021

6 unchanged sentences

Exercise of warrants

Repurchase of common shares

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

Changes in fair value of cash flow hedges, net of taxes

Foreign currency translation adjustment

Net income (loss)

Balances at March 31, 2021

Vesting of restricted share units

Fair value adjustment for common shares in deferred compensation plan exchanged for other investment options

Tax withholdings related to net share settlements of equity-based compensation

Equity-based compensation

Exercise of warrants

Issuance of shares under employee share purchase plan

Repurchase of common shares

4 unchanged sentences

Foreign currency translation adjustment

Balances at June 30, 2021

Vesting of restricted share units

Restricted share units released from deferred compensation plan

Tax withholdings related to net share settlements of equity-based compensation

Equity-based compensation

Exercise of warrants

Issuance of shares under employee share purchase plan

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

Changes in fair value of cash flow hedges, net of taxes

Foreign currency translation adjustment

Balances at September 30, 2021

Balances at March 31, 2022

The accompanying notes are an integral part of these condensed consolidated financial statements.

14 unchanged sentences

Restricted share units released from deferred compensation plan

Fair value adjustment for common shares in deferred compensation plan exchanged for other investment options

Tax withholdings related to net share settlements of equity-based compensation

2 unchanged sentences

Repurchase of common shares

( 1,271,977 )

Cash dividends on common shares

4 unchanged sentences

Balances at March 31, 2021

Vesting of restricted share units

Restricted share units released from deferred compensation plan

Tax withholdings related to net share settlements of equity-based compensation

Equity-based compensation

Exercise of warrants

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

Changes in fair value of cash flow hedges, net of taxes

Foreign currency translation adjustment

Balances at June 30, 2020

Vesting of restricted share units

Fair value adjustment for common shares in deferred compensation plan exchanged for other investment options

Tax withholdings related to net share settlements of equity-based compensation

Equity-based compensation

Exercise of warrants

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

Changes in fair value of cash flow hedges, net of taxes

Foreign currency translation adjustment

Net income (loss)

Balances at September 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands of U.S.

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Amortization of intangibles

Loss on early extinguishment of debt

Deferred income taxes, net of acquisitions

Current period provision for expected credit losses

Amortization of debt issuance costs

8 unchanged sentences

Capital expenditures for property and equipment

Capital expenditures for undeveloped landfill property

Proceeds from disposal of assets

Net cash used in investing activities

( 1,034,840 )

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Principal payments on notes payable and long-term debt

( 1,814,034 )

( 1,505,641 )

Premiums paid on early extinguishment of debt

Payment of contingent consideration recorded at acquisition date

6 unchanged sentences

Proceeds from sale of common shares held in trust

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

9 unchanged sentences

The accompanying condensed consolidated financial statements relate to Waste Connections, Inc.

and its subsidiaries (the “Company”) for the three and nine month periods ended September 30, 2021 and 2020.

and its subsidiaries (the “Company”) for the three month periods ended March 31, 2022 and 2021.

In the opinion of management, the accompanying balance sheets and related interim statements of net income, comprehensive income (loss), cash flows and equity include all adjustments, consisting only of normal recurring items, necessary for their fair statement in conformity with U.S.

17 unchanged sentences

NEW ACCOUNTING STANDARDS

Accounting Standards Adopted

Income Taxes – Simplifying the Accounting for Income Taxes .

In December 2019, the Financial Accounting Standards Board (“FASB”) issued guidance that simplifies the accounting for income taxes as part of its overall initiative to reduce complexity in applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements.

The amendments include removal of certain exceptions to the general principles of income taxes, and simplification in several other areas such as accounting for a franchise tax that is partially based on income.

The standard is effective for public business entities that are U.S.

Securities and Exchange Commission (“SEC”) filers for annual periods beginning after December 15, 2020, and interim periods within those reporting periods.

The Company adopted the new standard as of January 1, 2021.

The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements.

Accounting Standards Pending Adoption

Reference Rate Reform – Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

In March 2020, the FASB issued guidance to provide temporary optional expedients and exceptions to the guidance in GAAP on

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance to provide temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

One-week and two-month U.S.

dollar LIBOR settings as well as all non-U.S.

dollar LIBOR settings will stop being published on December 31, 2021, while the remaining U.S.

dollar LIBOR settings stopped being published on December 31, 2021, while the remaining U.S.

dollar LIBOR settings will be discontinued on June 30, 2023.

2 unchanged sentences

Under the guidance, entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met.

The guidance is effective upon issuance.

The guidance on contract modifications is applied prospectively from March 12, 2020.

It may also be applied to modifications of existing contracts made earlier in the interim period that includes the effective date.

The guidance on hedging is applied to eligible hedging relationships existing as of the beginning of the interim period that includes the effective date and to new eligible hedging relationships entered into after the beginning of that interim period.

The guidance was effective upon issuance.

The guidance on contract modifications was applied prospectively from March 12, 2020.

The guidance on hedging is applied to eligible hedging relationships existing as of the beginning of the

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

interim period that includes the effective date and to new eligible hedging relationships entered into after the beginning of that interim period.

The relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022 or hedging relationships entered into or evaluated after that date.

2 unchanged sentences

The Company had a combined $ 1,474,500 of U.S.

based LIBOR loans as of September 30, 2021.

The Company estimates that if the reference rate for these loans had transitioned from LIBOR to SOFR as of September 30, 2021, the impact to annual interest expense would have been an increase of less than $ 1,000 .

LIBOR based loans as of March 31, 2022.

The Company estimates that if the reference rate for these loans had transitioned from LIBOR to SOFR as of March 31, 2022, the impact to annual interest expense would have been immaterial.

This relief is expected to permit the Company to maintain cash flow ‎hedge accounting as described in Note 11.

SEC amends MD&A and other Regulation S-K disclosure requirements .

In November 2020, the SEC adopted amendments to Regulation S-K to eliminate certain disclosure requirements and to revise several others to make the disclosures provided in management’s discussion and analysis more useful for investors.

Key changes included:

(1) enhancements and clarification of the disclosure requirements for liquidity and capital resources;

(2) elimination of five years of Selected Financial Data;

(3) replacement of the current requirement for two years of quarterly tabular disclosure with a principles-based requirement to provide information only when there are material retrospective changes;

(4) codification of prior SEC guidance on critical accounting estimates;

(5) elimination of the tabular disclosure of contractual obligations;

and (6) conforming amendments for foreign private issuers.

The amended rules were posted to the Federal Register on January 11, 2021 and became effective February 10, 2021.

Registrants are required to comply with the new rules beginning with the first fiscal year ending on or after August 9, 2021.

Registrants may early adopt the amended rules at any time after the effective date (on an item-by-item basis), as long as they provide the disclosure responsive to an amended item in its entirety .

IMPAIRMENTS OF PROPERTY, EQUIPMENT, GOODWILL AND INTANGIBLE ASSETS

Property, equipment and finite-lived intangible assets are carried on the Company’s consolidated financial statements based on their cost less accumulated depreciation or amortization.

Finite-lived intangible assets consist of long-term franchise agreements, contracts, customer lists, permits and other agreements.

The recoverability of these assets is tested whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Typical indicators that an asset may be impaired include, but are not limited to, the following:

● a significant adverse change in legal factors or in the business climate;

● an adverse action or assessment by a regulator;

● a more likely than not expectation that a segment or a significant portion thereof will be sold;

● the testing for recoverability of a significant asset group within a segment;

● current period or expected future operating cash flow losses.

If any of these or other indicators occur, a test of recoverability is performed by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows.

If the carrying value is in excess of the undiscounted expected future cash flows, impairment is measured by comparing the fair value of the asset to its carrying value.

Fair value is determined by an internally developed discounted projected cash flow analysis of the asset.

Cash flow projections are sometimes based on a group of assets, rather than a single asset.

If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether an impairment has occurred for the group of assets for which the projected cash flows can be identified.

If the fair value of an asset is determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of the difference is recorded in the period that the impairment indicator occurs.

Several impairment indicators are beyond the Company’s control, and whether or not they will occur cannot be predicted with any certainty.

Estimating future cash flows requires significant judgment and projections may vary from cash flows eventually realized.

There are other considerations for impairments of landfills, as described below.

There are certain indicators listed above that require significant judgment and understanding of the waste industry when applied to landfill development or expansion projects.

A regulator or court may deny or overturn a landfill development or landfill expansion permit application before the development or expansion permit is ultimately granted.

Management may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace.

Therefore, certain events could occur in the ordinary course of business and not necessarily be considered indicators of impairment due to the unique nature of the waste industry.

Goodwill and indefinite-lived intangible assets are tested for impairment on at least an annual basis in the fourth quarter of the year.

In addition, the Company evaluates its reporting units for impairment if events or circumstances similar to the indicators listed above change between annual tests indicating a possible impairment.

Through June 30, 2020, the Company’s reporting units consisted of its five geographic solid waste operating segments and its non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal services segment.

As of July 2020, the Company combined all operations of the E&P segment into the Southern segment, based on the Company’s determination that the two operating segments met the aggregation criteria, and eliminated the E&P segment.

The Company estimates the fair value of each of its reporting units using discounted cash flow analyses.

Discounted cash flow analyses require significant assumptions and estimates about the future operations of each reporting unit and the future discrete cash flows related to each indefinite-lived intangible asset.

Significant judgments inherent in these analyses include the determination of appropriate discount rates, the amount and timing of expected future cash flows, growth rates and income tax rates.

The Company compares the fair value of each reporting unit with the carrying value of the net assets assigned to each reporting unit.

If the fair value of a reporting unit is greater than the carrying value of the net assets, including goodwill, assigned to the reporting unit, then no impairment results.

If the fair value is less than its carrying value, an impairment charge is recorded for the amount by which the carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

In testing indefinite-lived intangible assets for impairment, the Company compares the estimated fair value of each indefinite-lived intangible asset to its carrying value.

If the fair value of the indefinite-lived

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

intangible asset is less than its carrying value, an impairment charge would be recorded to earnings in the Company’s Condensed Consolidated Statements of Net Income.

The demand for the Company’s E&P waste services depends on the continued demand for, and production of, oil and natural gas.

Crude oil and natural gas prices historically have been volatile.

Macroeconomic and geopolitical conditions, including a significant decline in oil prices occurring in 2020 driven by both surplus production and supply, as well as the decrease in demand caused by factors including the coronavirus disease 2019 (“COVID-19”) pandemic, resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in demand for the Company’s E&P waste services in 2020.

During the nine months ended September 30, 2020, total E&P revenue declined $ 75,158 , compared to the prior year period, on oil rig count declines of 72 % in certain basins.

The most impacted basins included the Williston Basin in North Dakota, the Eagle Ford Basin in Texas and the Powder River Basin in Wyoming, all of which have relatively high costs associated with drilling, making them less attractive than other basins, including the Permian Basin in Texas and New Mexico.

Additionally, across the industry there was uncertainty regarding future demand for oil and related services, as noted by several energy companies during 2020, many of whom are customers of the Company’s E&P operations.

These companies wrote down the values of their oil and gas assets in anticipation of the potential for the decarbonization of their energy product mix given an increased global focus on reducing greenhouse gases and addressing climate change.

Such uncertainty regarding global demand had a significant impact on the investment and operating plans of the Company’s E&P waste customers in the basins where the Company operates.

The decrease in E&P activity, together with market expectations of a likely slow recovery in oil prices, reduced the expected future period cash flows of the Company’s E&P operations.

Based on these events, the Company concluded that a triggering event occurred which required the Company to perform an impairment test of the property and equipment and intangible assets of its E&P operations as of June 30, 2020 using July 2020 industry projections for drilling activity by basin as the basis for expectations about future activity.

Based upon the results of the impairment test, the Company concluded that the carrying value exceeded the projected undiscounted cash flows of four E&P landfills.

The next step was to calculate the fair value of these four landfills using an income approach employing a discounted cash flow (DCF) model over the lesser of 40 years or the remaining life of each landfill.

Additional key assumptions used in the DCF model included a discount rate of 12 % applied to the cash flows, annual revenue projections based on E&P waste resulting from projected levels of oil and natural gas E&P activity during the forecast period at each location, gross margins based on estimated operating expense requirements during the forecast period, estimated capital expenditures over the forecast period and income taxes based on the estimated federal and state income tax rates applicable during the cash flow periods, all of which were classified as Level 3 in the fair value hierarchy.

For each of the four landfills, the carrying value exceeded the calculated discounted fair value, resulting in the recording of an impairment charge of $ 417,384 to Impairments and other operating items in the Condensed Consolidated Statements of Net Income during the nine months ended September 30, 2020.

The four landfills had $ 0 of intangible assets at June 30, 2020;

therefore, no impairment charge was attributable to intangible assets.

The impairment charge reduced the carrying value of property and equipment by $ 417,384 .

If the estimated annual cash flows in the DCF model for each asset or asset group tested was changed by 10%, the resulting impairment charge would change by approximately $ 3,000 .

The aforementioned impairment charges were partially offset by a $ 4,145 adjustment to reduce the fair value of an amount payable in 2021 under a liability-classified contingent consideration arrangement calculated on future earnings and cash flows associated with the acquisition of an E&P business in 2014.

Based upon the outlook for E&P waste services in the market where the acquired business operates, the payment of the contingent consideration was deemed unlikely and the carrying value was reduced to $ 0 as of June 30, 2020, resulting in a credit to Impairments and other operating items in the Condensed Consolidated Statements of Net Income.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The Company’s operations primarily consist of providing non-hazardous waste collection, transfer, disposal and recycling services, E&P services, and intermodal services.

The Company’s operations primarily consist of providing non-hazardous waste collection, transfer, disposal and recycling services, non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal services and intermodal services.

The following table disaggregates the Company’s revenues by service line for the periods indicated:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Industrial and construction roll off

4 unchanged sentences

In the event that the Company bills for services in advance of performance, it recognizes deferred revenue for the amount billed and subsequently recognizes revenue at the time the service is provided.

Substantially all of the deferred revenue recorded as of June 30, 2021 was recognized as revenue during the three months ended September 30, 2021 when the service was performed.

Substantially all of the deferred revenue recorded as of December 31, 2021 was recognized as revenue during the three months ended March 31, 2022 when the service was performed.

See Note 10 for additional information regarding revenue by reportable segment.

1 unchanged sentence

The incremental direct costs of obtaining a contract, which consist of sales incentives, are recognized as Other assets in the Company’s Condensed Consolidated Balance Sheet, and are amortized to Selling, general and administrative expense over the estimated life of the relevant customer relationship, which ranges from one to five years .

The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity would have recognized is one year or less.

The Company had $ 18,954 and $ 19,669 of deferred sales incentives at September 30, 2021 and December 31, 2020, respectively.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded when billed or accrued and represent claims against third parties that will be settled in cash.

The carrying value of the Company’s receivables, net of the allowance for credit losses, represents their estimated net realizable value.

The allowance for credit losses is based on management’s assessment of the collectability of assets pooled together with similar risk characteristics.

The Company monitors the collectability of its trade receivables as one overall pool due

The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

to all trade receivables having similar risk characteristics.

that the entity would have recognized is one year or less.

The Company had $ 19,627 and $ 18,954 of deferred sales incentives at March 31, 2022 and December 31, 2021, respectively.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded when billed or accrued and represent claims against third parties that will be settled in cash.

The carrying value of the Company’s receivables, net of the allowance for credit losses, represents their estimated net realizable value.

The allowance for credit losses is based on management’s assessment of the collectability of assets pooled together with similar risk characteristics.

The Company monitors the collectability of its trade receivables as one overall pool due to all trade receivables having similar risk characteristics.

The Company estimates its allowance for credit losses based on historical collection trends, the age of outstanding receivables, geographical location of the customer, existing economic conditions and reasonable forecasts.

1 unchanged sentence

Past-due receivable balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

Nine Months Ended September 30,

The following is a rollforward of the Company’s allowance for credit losses for the periods indicated:

Three Months Ended March 31,

Beginning balance

5 unchanged sentences

LANDFILL ACCOUNTING

At September 30, 2021, the Company’s landfills consisted of 84 owned landfills, five landfills operated under life-of-site operating agreements and five landfills operated under limited-term operating agreements.

The Company’s landfills had site costs with a net book value of $ 2,601,014 at September 30, 2021.

At March 31, 2022, the Company’s landfills consisted of 84 owned landfills, five landfills operated under life-of-site operating agreements and five landfills operated under limited-term operating agreements.

The Company’s landfills had site costs with a net book value of $ 2,688,673 at March 31, 2022.

For the Company’s landfills operated under limited-term operating agreements and life-of-site operating agreements, the owner of the property (generally a municipality) usually owns the permit and the Company operates the landfill for a contracted term.

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The Company’s landfill depletion rate is based on the term of the operating agreement at its operated landfill that has capitalized expenditures.

Expansion airspace consists of additional disposal capacity being pursued through means of an expansion that has not yet been permitted.

Expansion airspace that meets certain criteria is included in the estimate of total landfill airspace.

Based on remaining permitted capacity as of September 30, 2021, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 27 years .

As of September 30, 2021, the Company is seeking to expand permitted capacity at 12 of its owned landfills and three landfills that it operates under life-of-site operating agreements, and considers the achievement of these expansions to be probable.

Although the Company cannot be certain that all future expansions will be permitted as designed, the average remaining life, when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume, of the Company’s owned landfills and landfills operated under life-of-site operating agreements is approximately 32 years .

The estimated remaining lives of the Company’s owned landfills and landfills operated under life-of-site operating agreements range from 1 to 283 years , with approximately 90 % of the projected annual disposal volume from landfills with remaining lives of less than 70 years .

Expansion airspace consists of additional disposal capacity being

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

During the nine months ended September 30, 2021 and 2020, the Company expensed $ 160,470 and $ 149,988 , respectively, or an average of $ 4.56 and $ 4.51 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

pursued through means of an expansion that has not yet been permitted.

Expansion airspace that meets certain criteria is included in the estimate of total landfill airspace.

Based on remaining permitted capacity as of March 31, 2022, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 29 years .

As of March 31, 2022, the Company is seeking to expand permitted capacity at nine of its owned landfills and three landfills that it operates under life-of-site operating agreements, and considers the achievement of these expansions to be probable.

The estimated remaining lives of the Company’s owned landfills and landfills operated under life-of-site operating agreements range from 1 to 330 years , with approximately 90 % of the projected annual disposal volume from landfills with remaining lives of less than 70 years .

During the three months ended March 31, 2022 and 2021, the Company expensed $ 53,826 and $ 46,137 , respectively, or an average of $ 4.90 and $ 4.53 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

The Company reserves for estimated final capping, closure and post-closure maintenance obligations at the landfills it owns and landfills it operates under life-of-site operating agreements.

2 unchanged sentences

Any changes in expectations that result in a downward revision (or no revision) to the estimated undiscounted cash flows result in a liability that is inflated and discounted at rates reflecting the market conditions at the time the cash flows were originally estimated.

This policy results in the Company’s final capping, closure and post-closure liabilities being recorded in “layers.” The Company’s discount rate assumption for purposes of computing 2021 and 2020 “layers” for final capping, closure and post-closure obligations was 3.25 % and 4.75 %, respectively, which reflects the Company’s long-term credit adjusted risk free rate as of the end of 2020 and 2019.

The Company’s inflation rate assumption is 2.25 % and 2.50 % for the years ending December 31, 2021 and 2020, respectively.

This policy results in the Company’s final capping, closure and post-closure liabilities being recorded in “layers.” The Company’s discount rate assumption for purposes of computing 2022 and 2021 “layers” for final capping, closure and post-closure obligations was 3.25 % for both years, which reflects the Company’s long-term credit adjusted risk free rate as of the end of 2021 and 2020.

The Company’s long-term inflation rate assumption is 2.25 % for the years ending December 31, 2022 and 2021.

The resulting final capping, closure and post-closure obligations are recorded on the Condensed Consolidated Balance Sheet along with an offsetting addition to site costs which is amortized to depletion expense as the remaining landfill airspace is consumed.

Interest is accreted on the recorded liability using the corresponding discount rate.

During the nine months ended September 30, 2021 and 2020, the Company expensed $ 10,783 and $ 11,174 , respectively, or an average of $ 0.31 and $ 0.34 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2020 to September 30, 2021:

During the three months ended March 31, 2022 and 2021, the Company expensed $ 4,050 and $ 3,655 , respectively, or an average of $ 0.37 and $ 0.36 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2021 to March 31, 2022:

Final capping, closure and post-closure liability at December 31, 2021

2 unchanged sentences

Closure payments

Assumption of closure liabilities from acquisitions

Disposition of closure liabilities from divested operations

Foreign currency translation adjustment

Final capping, closure and post-closure liability at September 30, 2021

Liability adjustments of $ 5,008 for the nine months ended September 30, 2021, represent non-cash changes to final capping, closure and post-closure liabilities and are recorded on the Condensed Consolidated Balance Sheets along with an offsetting addition to site costs, which is amortized to depletion expense as the remaining landfill airspace is consumed.

Final capping, closure and post-closure liability at March 31, 2022

Liability adjustments of $ 21,568 for the three months ended March 31, 2022, represent non-cash changes to final capping, closure and post-closure liabilities and are recorded on the Condensed Consolidated Balance Sheets along with an offsetting addition to site costs, which is amortized to depletion expense as the remaining landfill airspace is consumed.

The final capping, closure and post-closure liability is included in Other long-term liabilities in the Condensed Consolidated Balance Sheets.

The Company performs its annual review of its cost and capacity estimates in the first quarter of each year.

At September 30, 2021 and December 31, 2020, $ 12,816 and $ 12,533 , respectively, of the Company’s restricted cash balance and $ 55,716 and $ 54,833 , respectively, of the Company’s restricted investments balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

The Company acquired 14 individually immaterial non-hazardous solid waste collection, transfer and recycling businesses during the nine months ended September 30, 2021.

The total acquisition-related costs incurred during the

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

nine months ended September 30, 2021 for these acquisitions were $ 6,220 .

At March 31, 2022 and December 31, 2021, $ 7,284 and $ 12,609 , respectively, of the Company’s restricted cash balance and $ 56,711 and $ 56,289 , respectively, of the Company’s restricted investments balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

The Company acquired four individually immaterial non-hazardous solid waste collection, transfer and recycling businesses during the three months ended March 31, 2022.

The total acquisition-related costs incurred during the three months ended March 31, 2022 for these acquisitions were $ 4,540 .

These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Net Income.

The Company acquired 11 individually immaterial non-hazardous solid waste collection, transfer, recycling and disposal businesses during the nine months ended September 30, 2020.

The total acquisition-related costs incurred during the nine months ended September 30, 2020 for these acquisitions were $ 4,497 .

The Company acquired one individually immaterial non-hazardous solid waste collection business during the three months ended March 31, 2021.

The total acquisition-related costs incurred during the three months ended March 31, 2021 for this acquisition were $ 526 .

These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Net Income.

2 unchanged sentences

Goodwill acquired is attributable to the synergies and ancillary growth opportunities expected to arise after the Company’s acquisition of these businesses.

The following table summarizes the consideration transferred to acquire these businesses and the preliminary amounts of identifiable assets acquired and liabilities assumed at the acquisition dates for the acquisitions consummated in the nine months ended September 30, 2021 and 2020:

Fair value of consideration transferred:

Change in open working capital settlements at quarter end

Recognized amounts of identifiable assets acquired and liabilities assumed associated with businesses acquired:

Accounts receivable

Prepaid expenses and other current assets

Operating lease right-of-use assets

Property and equipment

Long-term franchise agreements and contracts

Indefinite-lived intangibles

Customer lists

Permits and other intangibles

Accounts payable and accrued liabilities

Current portion of operating lease liabilities

Deferred revenue

Contingent consideration

Long-term portion of operating lease liabilities

Other long-term liabilities

Deferred income taxes

Total identifiable net assets

Goodwill acquired during the nine months ended September 30, 2021 and 2020, totaling $ 114,006 and $ 48,926 , respectively, is expected to be deductible for tax purposes.

Goodwill acquired during the three months ended March 31, 2022 and 2021, totaling $ 80,455 and $ 6,091 , respectively, is expected to be deductible for tax purposes.

The fair value of acquired working capital related to 19 individually immaterial acquisitions completed during the twelve months ended March 31, 2022, is provisional pending receipt of information from the acquirees to support the fair value of the assets acquired and liabilities assumed.

Any adjustments recorded relating to finalizing the working capital for these 19 acquisitions are not expected to be material to the Company’s financial position.

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The fair value of acquired working capital related to 11 individually immaterial acquisitions completed during the twelve months ended September 30, 2021, is provisional pending receipt of information from the acquirees to support the fair value of the assets acquired and liabilities assumed.

Any adjustments recorded relating to finalizing the working capital for these 11 acquisitions are not expected to be material to the Company’s financial position.

The gross amount of trade receivables due under contracts acquired during the nine months ended September 30, 2021, is $ 21,673 , of which $ 1,881 is expected to be uncollectible.

The gross amount of trade receivables due under contracts acquired during the nine months ended September 30, 2020, is $ 3,840 , of which $ 35 is expected to be uncollectible.

The Company did not acquire any other class of receivable as a result of the acquisitions of these businesses.

INTANGIBLE ASSETS, NET

Intangible assets, exclusive of goodwill, consisted of the following at September 30, 2021:

Intangible assets, exclusive of goodwill, consisted of the following at March 31, 2022:

Finite-lived intangible assets:

4 unchanged sentences

Solid waste collection and transportation permits

Material recycling facility permits

E&P facility permits

Intangible assets, exclusive of goodwill

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the nine months ended September 30, 2021 was 20.7 years.

The weighted-average amortization period of customer lists acquired during the nine months ended September 30, 2021 was 11.3 years.

The weighted-average amortization period of finite-lived permits and other acquired during the nine months ended September 30, 2021 was 40.0 years.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the three months ended March 31, 2022 was 16.1 years.

The weighted-average amortization period of customer lists acquired during the three months ended March 31, 2022 was 11.2 years.

The weighted-average amortization period of finite-lived permits and other acquired during the three months ended March 31, 2022 was 10.0 years.

Intangible assets, exclusive of goodwill, consisted of the following at December 31, 2021:

5 unchanged sentences

Solid waste collection and transportation permits

Material recycling facility permits

E&P facility permits

11 unchanged sentences

LONG-TERM DEBT

The following table presents the Company’s long-term debt as of September 30, 2021 and December 31, 2020:

September 30,

The following table presents the Company’s long-term debt as of March 31, 2022 and December 31, 2021:

Revolver under Credit Agreement, bearing interest ranging from 1.46 % to 3.50 % (a)

Term loan under Credit Agreement, bearing interest at 1.46 % (a)

4.64 % Senior Notes due 2021 (b)

2.39 % Senior Notes due 2021 (c)

3.09 % Senior Notes due 2022 (d)

2.75 % Senior Notes due 2023 (d)

3.24 % Senior Notes due 2024 (d)

3.41 % Senior Notes due 2025 (d)

3.03 % Senior Notes due 2026 (d)

3.49 % Senior Notes due 2027 (d)

4.25 % Senior Notes due 2028

4 unchanged sentences

3.05 % Senior Notes due 2050

2.95 % Senior Notes due 2052

Notes payable to sellers and other third parties, bearing interest ranging from 2.42 % to 10.35 %, principal and interest payments due periodically with due dates ranging from 2022 to 2036 (a)

Finance leases, bearing interest at 1.89 % with a lease expiration date of 2026 (a)

Finance leases, bearing interest at 1.89 % with lease expiration dates ranging from 2026 to 2027 (a)

Less – current portion

1 unchanged sentence

____________________

(a) Interest rates represent the interest rates in effect at September 30, 2021 .

(b) All of the outstanding 4.64 % Senior Notes due 2021 were redeemed by the Company on April 1, 2021 .

(d) All of the outstanding Senior Notes issued pursuant to the 2008 and 2016 master note purchase agreements were redeemed by the Company on September 20, 2021.

(a) Interest rates represent the interest rates in effect at March 31, 2022 .

WASTE CONNECTIONS, INC.

3 unchanged sentences

Credit Agreement

Details of the 2021 Credit Agreement and Credit Agreement, as applicable, are as follows:

September 30,

Details of the Credit Agreement are as follows:

Revolver under Credit Agreement

5 unchanged sentences

LIBOR rate loan

Amount drawn - U.S.

base rate loan

Interest rate applicable - U.S.

base rate loan

Amount drawn - U.S.

swingline loan

Interest rate applicable - U.S.

swingline loan

Amount drawn – Canadian bankers’ acceptance

6 unchanged sentences

based LIBOR loan

In addition to the $ 114,685 of letters of credit at September 30, 2021 issued and outstanding under the 2021 Credit Agreement, the Company has issued and outstanding letters of credit totaling $ 6,819 under facilities other than the 2021 Credit Agreement.

On March 21, 2018, the Company and the lenders named therein entered into an Amended and Restated Revolving Credit and Term Loan Agreement (as amended, restated, supplemented or otherwise modified and as in effect immediately prior to the Closing Date (as defined below), the “Credit Agreement”), pursuant to which the lenders made loans and other extensions of credit to the Company thereunder.

On July 30, 2021 (the “Closing Date”), the Company amended and restated the Credit Agreement in its entirety pursuant to a Second Amended and Restated Revolving Credit and Term Loan Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “2021 Credit Agreement”) entered into by the Company, as borrower, Bank of America, N.A., acting through its ‎Canada Branch, as the global agent, the swing line lender, and a letter of credit issuer, Bank of ‎America, N.A., as the U.S.

agent and a letter of credit issuer, the other lenders ‎named therein ‎(the “Lenders”) ‎and any other financial institutions from time to time party thereto.

The 2021 Credit Agreement has a scheduled maturity date of July 30, 2026 , which may be extended further upon agreement by the Lenders with respect to their respective commitments and credit extensions outstanding.

Pursuant to the terms and conditions of the 2021 Credit Agreement, the Lenders committed to providing a ‎$ 2,500,000 credit facility to the Company, consisting of (i) revolving advances up to an aggregate principal amount of $ 1,850,000 at any one time ‎outstanding (representing an increase of $ 287,500 from the Credit Agreement), and (ii) a term loan in an aggregate principal amount of $ 650,000 , which term loan was fully drawn as of the Closing Date (with existing term loans outstanding under the Credit Agreement immediately prior to the Closing Date continued and now outstanding under and governed by the terms of the 2021 Credit Agreement).

As part of the aggregate commitments under the revolving advances, the 2021 Credit Agreement provides for letters of credit to be issued at the request of the Company in an aggregate amount not to exceed $ 320,000 and for swing line loans to be issued at the request of the Company in an aggregate amount not to exceed the lesser of $ 100,000 and the aggregate commitments under the revolving advances.

This swing line sublimit is part of, and not in addition to, the aggregate commitments under the revolving advances.

Existing letters of credit in place under the Credit Agreement immediately prior to the Closing Date are continued and now deemed issued under and

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

governed by the terms of the 2021 Credit Agreement.

Subject to certain specified conditions and additional deliveries, the Company has the option to request increases in the aggregate commitments for revolving advances and one or more additional term loans, provided that (i) the aggregate principal amount of such requests does not exceed $ 500,000 and (ii) the aggregate principal amount of commitments and term loans under the credit facility does not exceed $ 3,000,000 .

As of the Closing Date, there are no commitments by Lenders for any such increases in aggregate commitments for revolving advances or additional term loans described in the preceding sentence.

Advances are available under the 2021 Credit Agreement in U.S.

dollars and Canadian dollars.

Interest accrues on the term loan at a LIBOR rate or a base rate, at the Company’s option, plus an applicable margin.

Interest accrues on revolving advances, at the Company’s option, (i) at a LIBOR rate or a base rate for U.S.

dollar borrowings, plus an applicable margin, and (ii) at the Canadian prime rate for Canadian dollar borrowings, plus an applicable margin.

Canadian dollar borrowings are also available by way of bankers' acceptances or BA equivalent notes, subject to the payment of a drawing fee.

The fees for letters of credit in U.S.

dollars and Canadian dollars are also based on the applicable margin.

The applicable margin used in connection with interest rates and fees is based on the debt rating of the Company’s public non-credit-enhanced, senior unsecured long-term debt (the “Debt ‎Rating”)‎.

The applicable margin for LIBOR rate loans, drawing fees for bankers’ acceptances, BA equivalent notes and letter of credit fees ranges from ‎ 0.750 % to 1.250 %‎, and the applicable margin for U.S.

base rate loans, Canadian prime rate loans and swing line loans ranges from 0.00 % to 0.250 %.

The Company will also pay a fee based on the Debt Rating on the actual daily unused amount of the aggregate revolving commitments ranging from 0.065 % to 0.150 %.‎ The 2021 Credit Agreement contains hardwired mechanics for the replacement of LIBOR, including (1) mechanics to transition to a rate based upon the secured overnight financing rate (“SOFR”) published by the Federal Reserve Bank of New York or a successor administrator on its website (or a successor source) upon the earlier of (x) LIBOR’s cessation or loss of representativeness, (y) June 30, 2023 and (z) the effectiveness of an early opt-in election by the Company and the agents subject to certain terms and (2) mechanics to transition to an alternate benchmark rate giving due consideration to any evolving or then-prevailing market conventions for U.S.

dollar-denominated syndicated credit facilities at such time upon the occurrence of certain subsequent transition events, the unavailability of SOFR-based alternatives or the effectiveness of an early opt-in election by the Company and the agents subject to certain terms.

The borrowings under the 2021 Credit Agreement are unsecured and there are no subsidiary guarantors under the 2021 Credit Agreement‎.

The 2021 Credit Agreement contains customary representations, warranties, covenants and events of default, including, among others, a change of control event of default and limitations on the incurrence of indebtedness and liens, new lines of business, mergers, transactions with affiliates and burdensome agreements.

During the continuance of an event of default, the Lenders may take a number of actions, including, among others, declaring the entire amount then outstanding under the 2021 Credit Agreement to be due and payable.

The 2021 Credit Agreement includes a financial covenant limiting, as of the last day of each fiscal quarter, the ratio of (a) Consolidated Total Funded Debt (as defined in the 2021 Credit Agreement) as of such date to (b) Consolidated EBITDA (as defined in the 2021 Credit Agreement), measured for the preceding 12 months, to not more than 3.75 to 1.00 (or 4.25 to 1.00 during material acquisition periods, subject to certain limitations) .

As of September 30, 2021, the Company was in compliance with its financial covenants under the 2021 Credit Agreement.

On September 20, 2021, the Company completed an underwritten public offering (the “Offering”) of $ 650,000 aggregate principal amount of 2.20 % Senior Notes due 2032 (the “2032 Senior Notes”) and $ 850,000 aggregate principal amount of 2.95 % Senior Notes due 2052 (the “2052 Senior Notes” and, together with the 2032 Senior Notes, the “Notes”).

The Company issued the Notes under the Indenture, dated as of November 16, 2018 (the “Base Indenture”), by and between the Company and U.S.

Bank National Association, as trustee (the “Trustee”), as supplemented by the Fifth Supplemental

In addition to the $ 44,719 of letters of credit at March 31, 2022 issued and outstanding under the Credit Agreement, the Company has issued and outstanding letters of credit totaling $ 81,569 under a facility other than the Credit Agreement.

On March 9, 2022, the Company completed an underwritten public offering of $ 500,000 aggregate principal amount of 3.20 % Senior Notes due 2032 (the “New 2032 Senior Notes”).

The Company issued the New 2032 Senior Notes under the Indenture, dated as of November 16, 2018 (the “Base Indenture”), by and between the Company and U.S.

Bank Trust Company, National Association, as successor in interest to U.S.

Bank National Association, as trustee (the “Trustee”), as supplemented by the Sixth Supplemental Indenture, dated as of March 9, 2022 (the “Supplemental Indenture” and the Base Indenture as so supplemented, the “Indenture”).

The Company will pay interest on the New 2032 Senior Notes semi-annually in arrears.

The New 2032 Senior Notes will mature on June 1, 2032 .

The New 2032 Senior Notes are the Company’s senior unsecured obligations, ranking equally in right of payment with its other existing and future unsubordinated debt and senior to any of its future subordinated debt.

The New 2032 Senior Notes are not guaranteed by any of the Company’s subsidiaries.

The Company may, prior to March 1, 2032 (three months before the maturity date) (the “Par Call Date”), redeem some or all of the New 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the New 2032 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the New 2032 Senior Notes redeemed discounted to the redemption date (assuming the New 2032 Senior Notes matured on the Par Call Date), plus, in either case, accrued and unpaid interest thereon to the redemption date.

Commencing on March 1, 2032 (three months before the maturity date), the Company may redeem some or all of the New 2032 Senior Notes, at any time and from time to time, at a redemption price equal to

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Indenture, dated as of September 20, 2021 (the “Supplemental Indenture” and the Base Indenture as so supplemented, the “Indenture”).

In connection with the Offering, the Company exercised its right to repay the $ 1,500,000 of senior notes (the “Private Notes”) that were governed by its 2008 and 2016 master note purchase agreements.

The Company repaid the Private Notes, including the $ 110,617 make-whole payment, with the net proceeds from the Offering and borrowings under the revolving credit facility provided under its 2021 Credit Agreement.

The Company recorded $ 115,288 to Loss on early extinguishment of debt during the nine months ended September 30, 2021 due to the repayment of the Private Notes and associated make-whole premium and related offering fees and expenses.

The Company will pay interest on the Notes semi-annually in arrears.

The 2032 Senior Notes will mature on January 15, 2032 and the 2052 Senior Notes will mature on January 15, 2052 .

The Notes are the Company’s senior unsecured obligations, ranking equally in right of payment with its other existing and future unsubordinated debt and senior to any of its future subordinated debt.

The Notes are not guaranteed by any of the Company’s subsidiaries.

The Company may, prior to October 15, 2031 (three months before the maturity date), redeem some or all of the 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the 2032 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the 2032 Senior Notes redeemed.

Commencing on October 15, 2031 (three months before the maturity date), the Company may redeem some or all of the 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the 2032 Senior Notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

The Company may, prior to July 15, 2051 (six months before the maturity date), redeem some or all of the 2052 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the 2052 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the 2052 Senior Notes redeemed.

Commencing on July 15, 2051 (six months before the maturity date), the Company may redeem some or all of the 2052 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the 2052 Senior Notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

Under certain circumstances, the Company may become obligated to pay additional amounts (the “Additional Amounts”) with respect to the Notes to ensure that the net amounts received by each holder of the Notes will not be less than the amount such holder would have received if withholding taxes or deductions were not incurred on a payment under or with respect to the Notes.

If such payment of Additional Amounts are a result of a change in the laws or regulations, including a change in any official position, the introduction of an official position or a holding by a court of competent jurisdiction, of any jurisdiction from or through which payment is made by or on behalf of the Notes having power to tax, and the Company cannot avoid such payments of Additional Amounts through reasonable measures, then the Company may redeem the Notes then outstanding at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

If the Company experiences certain kinds of changes of control, each holder of the Notes may require the Company to repurchase all or a portion of the Notes for cash at a price equal to 101 % of the aggregate principal amount of such Notes, plus any accrued but unpaid interest up to the date of repurchase.

the principal amount of the New 2032 Senior Notes being redeemed plus accrued and unpaid interest thereon to the redemption date.

Under certain circumstances, the Company may become obligated to pay additional amounts (the “Additional Amounts”) with respect to the New 2032 Senior Notes to ensure that the net amounts received by each holder of the New 2032 Senior Notes will not be less than the amount such holder would have received if withholding taxes or deductions were not incurred on a payment under or with respect to the New 2032 Senior Notes.

If such payment of Additional Amounts are a result of a change in the laws or regulations, including a change in any official position, the introduction of an official position or a holding by a court of competent jurisdiction, of any jurisdiction from or through which payment is made by or on behalf of the New 2032 Senior Notes having power to tax, and the Company cannot avoid such payments of Additional Amounts through reasonable measures, then the Company may redeem the New 2032 Senior Notes then outstanding at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

If the Company experiences certain kinds of changes of control, each holder of the New 2032 Senior Notes may require the Company to repurchase all or a portion of the New 2032 Senior Notes for cash at a price equal to 101 % of the aggregate principal amount of such New 2032 Senior Notes, plus any accrued and unpaid interest, if any, to, but excluding the purchase date.

The covenants in the Indenture include limitations on liens, sale-leaseback transactions and mergers and sales of all or substantially all of the Company’s assets.

The Indenture also includes customary events of default with respect to the Notes.

As of September 30, 2021, the Company was in compliance with all applicable covenants in the Indenture.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Upon an event of default, the principal of and accrued and unpaid interest on all the Notes may be declared to be due and payable by the Trustee or the holders of not less than 25 % in principal amount of the outstanding Notes.

Upon such a declaration, such principal and accrued interest on all of the Notes will be due and payable immediately.

In the case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of the Notes.

Under certain circumstances, the holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

The Indenture also includes customary events of default with respect to the New 2032 Senior Notes.

As of March 31, 2022, the Company was in compliance with all applicable covenants in the Indenture.

Upon an event of default, the principal of and accrued and unpaid interest on all the New 2032 Senior Notes may be declared to be due and payable by the Trustee or the holders of not less than 25 % in principal amount of the outstanding New 2032 Senior Notes.

Upon such a declaration, such principal and accrued interest on all of the New 2032 Senior Notes will be due and payable immediately.

In the case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding New 2032 Senior Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of the New 2032 Senior Notes.

Under certain circumstances, the holders of a majority in principal amount of the outstanding New 2032 Senior Notes may rescind any such acceleration with respect to the New 2032 Senior Notes and its consequences.

SEGMENT REPORTING

1 unchanged sentence

No single contract or customer accounted for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.

The Company manages its operations through five geographic operating segments, which are also its reportable segments.

The Company manages its operations through the following five geographic solid waste operating segments:

Eastern, Southern, Western, Central and Canada.

The Company’s five geographic solid waste operating segments comprise its reportable segments.

Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts.

The Company’s Southern segment services customers located in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Dakota, southern Oklahoma, western Tennessee, Texas, Wyoming and along the Gulf of Mexico;

the Company’s Eastern segment services customers located in Delaware, northern Illinois, Kentucky, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin;

the Company’s Western segment services customers located in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming;

the Company’s Central segment services customers located in Arizona, Colorado, southern Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota, western Texas, Utah and eastern Wyoming;

and the Company’s Canada segment services customers located in the state of Michigan and in the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The Company’s Chief Operating Decision Maker evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is segment EBITDA.

3 unchanged sentences

A reconciliation of segment EBITDA to Income before income tax provision is included at the end of this Note 10.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Summarized financial information concerning the Company’s reportable segments for the three and nine months ended September 30, 2021 and 2020, is shown in the following tables:

Summarized financial information concerning the Company’s reportable segments for the three months ended March 31, 2022 and 2021, is shown in the following tables:

Three Months Ended

September 30, 2021

March 31, 2022

Corporate (a)

Three Months Ended

September 30, 2020

Corporate (a)

Nine Months Ended

September 30, 2021

Corporate (a)

Nine Months Ended

September 30, 2020

March 31, 2021

Corporate (a)

2 unchanged sentences

Direct acquisition expenses, expenses associated with common shares held in the deferred compensation plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company are not allocated to the five operating segments and comprise the net EBITDA of the Company’s Corporate segment for the periods presented.

(b) Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments.

Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.

(c) For those items included in the determination of segment EBITDA, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

(b) Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments.

Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.

(c) For those items included in the determination of segment EBITDA, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

Total assets for each of the Company’s reportable segments at September 30, 2021 and December 31, 2020, were as follows:

September 30,

The following tables show changes in goodwill during the nine months ended September 30, 2021 and 2020, by reportable segment:

Total assets for each of the Company’s reportable segments at March 31, 2022 and December 31, 2021, were as follows:

The following tables show changes in goodwill during the three months ended March 31, 2022 and 2021, by reportable segment:

Balance as of December 31, 2021

1 unchanged sentence

Goodwill acquisition adjustments

Goodwill divested

Impact of changes in foreign currency

Balance as of September 30, 2021

Balance as of March 31, 2022

Balance as of December 31, 2020

Goodwill acquired

Goodwill acquisition adjustments

Impact of changes in foreign currency

Balance as of September 30, 2020

Balance as of March 31, 2021

WASTE CONNECTIONS, INC.

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Eastern segment EBITDA

10 unchanged sentences

Other income (expense), net

Loss on early extinguishment of debt

Income before income tax provision

6 unchanged sentences

The Company’s strategy to achieve that objective involves entering into interest rate swaps.

The interest rate swaps outstanding at September 30, 2021 were specifically designated to the Credit Agreement and accounted for as cash flow hedges.

At September 30, 2021, the Company’s derivative instruments included six interest rate swap agreements as follows:

The interest rate swaps outstanding at March 31, 2022 were specifically designated to the Credit Agreement and accounted for as cash flow hedges.

At March 31, 2022, the Company’s derivative instruments included six interest rate swap agreements as follows:

Interest Rate

16 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The fair values of derivative instruments designated as cash flow hedges as of September 30, 2021, were as follows:

The fair values of derivative instruments designated as cash flow hedges as of March 31, 2022, were as follows:

Derivatives Designated as Cash

4 unchanged sentences

Interest rate swaps

Prepaid expenses and other current assets

Other assets, net

Accrued liabilities (a)

2 unchanged sentences

____________________

(a) Represents the estimated amount of the existing unrealized losses on interest rate swaps as of September 30, 2021 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.

(a) Represents the estimated amount of the existing unrealized losses on interest rate swaps as of March 31, 2022 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.

The actual amounts reclassified into earnings are dependent on future movements in interest rates.

10 unchanged sentences

Total derivatives designated as cash flow hedges

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three and nine months ended September 30, 2021 and 2020:

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three months ended March 31, 2022 and 2021:

Amount of (Gain) or Loss Reclassified

7 unchanged sentences

Three Months Ended

September 30,

Interest rate swaps

Interest expense

Amount of (Gain) or Loss Reclassified

Designated as Cash

Amount of Gain or (Loss) Recognized

from AOCIL into Earnings,

as AOCIL on Derivatives, Net of Tax (a)

Classification

Net of Tax (b)

Nine Months Ended

September 30,

Interest rate swaps

Interest expense

____________________

5 unchanged sentences

The Company’s financial instruments consist primarily of cash and equivalents, trade receivables, restricted cash and investments, trade payables, debt instruments, contingent consideration obligations and interest rate swaps.

As of September 30, 2021 and December 31, 2020, the carrying values of cash and equivalents, trade receivables, restricted cash

As of March 31, 2022 and December 31, 2021, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are considered to be representative of their respective fair values.

The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of March 31, 2022 and December 31, 2021, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as Level 2

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

and investments, trade payables and contingent consideration are considered to be representative of their respective fair values.

The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of September 30, 2021 and December 31, 2020, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as Level 2 within the fair value hierarchy.

The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of September 30, 2021 and December 31, 2020, are as follows:

within the fair value hierarchy.

The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of March 31, 2022 and December 31, 2021, are as follows:

Carrying Value at

Fair Value* at

September 30,

4.64 % Senior Notes due 2021

2.39 % Senior Notes due 2021

3.09 % Senior Notes due 2022

2.75 % Senior Notes due 2023

3.24 % Senior Notes due 2024

3.41 % Senior Notes due 2025

3.03 % Senior Notes due 2026

Fair Value (a) at

4.25 % Senior Notes due 2028

10 unchanged sentences

NET INCOME PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income per common share attributable to the Company’s shareholders for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended

Nine Months Ended

September 30,

Net income attributable to Waste Connections for basic and diluted earnings per share

2 unchanged sentences

Diluted shares outstanding

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

FAIR VALUE MEASUREMENTS

4 unchanged sentences

and Level 3, defined as unobservable inputs that are not corroborated by market data.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and restricted cash and investments.

At September 30, 2021 and December 31, 2020, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps.

At March 31, 2022 and December 31, 2021, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps.

The Company’s interest rate swaps are recorded at their estimated fair values based on quotes received from financial institutions that trade these contracts.

1 unchanged sentence

For the Company’s interest rate swaps, the Company also considers the Company’s creditworthiness in its determination of the fair value measurement of these instruments in a net liability position and the counterparties’ creditworthiness in its determination of the fair value measurement of these instruments in a net asset position.

The Company’s restricted cash and investments are valued at quoted market prices in active markets for similar assets, which the Company receives from the financial institutions that hold such investments on its behalf.

The Company’s restricted cash and investments measured at fair value are invested primarily in money market accounts, bank time deposits, U.S.

The Company’s restricted cash is valued at quoted market prices in active markets for identical assets, which the Company receives from the financial institutions that hold such investments on its behalf.

The Company’s restricted cash measured at fair value is invested primarily in money market accounts, bank time deposits and U.S.

government and agency securities.

The Company’s restricted investments are valued at quoted market prices in active markets for similar assets, which the Company receives from the financial institutions that hold such investments on its behalf.

The Company’s restricted investments measured at fair value are invested primarily in money market accounts, bank time deposits, U.S.

government and agency securities and Canadian bankers’ acceptance notes.

The Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020, were as follows:

Fair Value Measurement at September 30, 2021 Using

The Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021, were as follows:

Fair Value Measurement at March 31, 2022 Using

Quoted Prices in

17 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Beginning balance

8 unchanged sentences

Other comprehensive income (loss) includes changes in the fair value of interest rate swaps that qualify for hedge accounting.

The components of other comprehensive income (loss) and related tax effects for the three and nine months ended September 30, 2021 and 2020 are as follows:

Three Months Ended September 30, 2021

Interest rate swap amounts reclassified into interest expense

Changes in fair value of interest rate swaps

Foreign currency translation adjustment

Three Months Ended September 30, 2020

Interest rate swap amounts reclassified into interest expense

Changes in fair value of interest rate swaps

Foreign currency translation adjustment

Nine Months Ended September 30, 2021

The components of other comprehensive income (loss) and related tax effects for the three months ended March 31, 2022 and 2021 are as follows:

Three Months Ended March 31, 2022

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

A rollforward of the amounts included in AOCIL, net of taxes, for the nine months ended September 30, 2021 and 2020, is as follows:

A rollforward of the amounts included in AOCIL, net of taxes, for the three months ended March 31, 2022 and 2021, is as follows:

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at September 30, 2021

Balance at March 31, 2022

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at September 30, 2020

Balance at March 31, 2021

See Note 11 for further discussion on the Company’s derivative instruments.

2 unchanged sentences

Restricted Share Units

A summary of activity related to restricted share units (“RSUs”) during the nine-month period ended September 30, 2021, is presented below:

A summary of activity related to restricted share units (“RSUs”) during the three-month period ended March 31, 2022, is presented below:

Unvested Shares

1 unchanged sentence

Vested and issued

Outstanding at September 30, 2021

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the nine-month period ended September 30, 2021 was $ 97.76 .

Outstanding at March 31, 2022

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the three-month period ended March 31, 2022 was $ 118.68 .

Recipients of the Company’s RSUs who participate in the Company’s Nonqualified Deferred Compensation Plan may have elected in years prior to 2015 to defer some or all of their RSUs as they vest until a specified date or dates they choose.

At the end of the deferral periods, unless a qualified participant makes certain other elections, the Company issues

At the end of the deferral periods, unless a qualified participant makes certain other elections, the Company issues to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs.

At March 31, 2022 and 2021, the Company had 81,712 and 158,610 vested deferred RSUs outstanding, respectively.

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs.

At September 30, 2021 and 2020, the Company had 100,861 and 178,119 vested deferred RSUs outstanding, respectively.

Performance-Based Restricted Share Units

A summary of activity related to performance-based restricted share units (“PSUs”) during the nine-month period ended September 30, 2021, is presented below:

A summary of activity related to performance-based restricted share units (“PSUs”) during the three-month period ended March 31, 2022, is presented below:

Unvested Shares

1 unchanged sentence

Vested and issued

Outstanding at September 30, 2021

During the nine months ended September 30, 2021, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2023 .

Outstanding at March 31, 2022

During the three months ended March 31, 2022, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2024 .

The Compensation Committee will determine the achievement of performance results and corresponding vesting of PSUs for each performance period.

The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the nine-month period ended September 30, 2021 was $ 96.99 .

The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the three-month period ended March 31, 2022 was $ 117.94 .

Deferred Share Units

A summary of activity related to deferred share units (“DSUs”) during the nine-month period ended September 30, 2021, is presented below:

A summary of activity related to deferred share units (“DSUs”) during the three-month period ended March 31, 2022, is presented below:

Vested Shares

Outstanding at December 31, 2021

Outstanding at September 30, 2021

Outstanding at March 31, 2022

The DSUs consist of a combination of DSU grants outstanding under the Progressive Waste share-based compensation plans that were continued by the Company following the Progressive Waste acquisition and DSUs granted by the Company since the Progressive Waste acquisition.

The weighted average grant-date fair value per share for the common shares underlying the DSUs granted during the nine-month period ended September 30, 2021 was $ 99.80 .

The weighted average grant-date fair value per share for the common shares underlying the DSUs granted during the three-month period ended March 31, 2022 was $ 121.00 .

Other Restricted Share Units

RSU grants outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon

A summary of activity related to Progressive Waste RSUs during the three-month period ended March 31, 2022, is presented below:

Outstanding at December 31, 2021

Outstanding at March 31, 2022

No RSUs under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016.

All remaining RSUs were vested as of March 31, 2019.

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

A summary of activity related to Progressive Waste RSUs during the nine-month period ended September 30, 2021, is presented below:

Outstanding at December 31, 2020

Outstanding at September 30, 2021

No RSUs under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016.

All remaining RSUs were vested as of March 31, 2019.

Share Based Options

Share based options outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon vesting.

A summary of activity related to Progressive Waste share based options during the nine-month period ended September 30, 2021, is presented below:

A summary of activity related to Progressive Waste share based options during the three-month period ended March 31, 2022, is presented below:

Outstanding at December 31, 2021

Outstanding at September 30, 2021

Outstanding at March 31, 2022

No share based options under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016.

3 unchanged sentences

Under the ESPP, qualified employees may elect to have payroll deductions withheld from their eligible compensation on each payroll date in amounts equal to or greater than one percent (1%) but not in excess of ten percent (10%) of eligible compensation in order to purchase the Company’s common shares under certain terms and subject to certain restrictions set forth in the ESPP.

The exercise price is equal to 95 % of the closing price of the Company’s common shares on the last day of the relevant offering period, subject to certain restrictions.

The exercise price is equal to 95 % of the closing price of the Company’s common shares on the last day of the relevant offering period, provided, however, that such exercise price will not be less than 85 % of the volume weighted average price of the Company’s common shares as reflected on the Toronto Stock Exchange (the “TSX”) over the final five trading days of such offering period.

The maximum number of shares that may be issued under the ESPP is 1,000,000 .

Under the ESPP, employees purchased 10,813 of the Company’s common shares for $ 1,275 during the nine months ended September 30, 2021.

Under the ESPP, employees purchased 12,015 of the Company’s common shares for $ 1,554 during the three months ended March 31, 2022.

Normal Course Issuer Bid

1 unchanged sentence

The renewal followed the conclusion of the Company’s NCIB that expired August 9, 2021.

The Company received Toronto Stock Exchange (the “TSX”) approval for its annual renewal of the NCIB on August 6, 2021.

The Company received TSX approval for its annual renewal of the NCIB on August 6, 2021.

Under the NCIB, the Company may make share repurchases only in the open market, including on the New York Stock Exchange (the “NYSE”), the TSX, and/or alternative Canadian trading systems, at the prevailing market price at the time of the transaction.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

In accordance with TSX rules, any daily repurchases made through the TSX and alternative Canadian trading systems is limited to a maximum of 75,704 common shares, which represents 25% of the average daily trading volume on the TSX of 302,816 common shares for the period from February 1, 2021 to July 31, 2021.

3 unchanged sentences

All common shares purchased under the NCIB shall be immediately cancelled following their repurchase.

For the nine months ended September 30, 2021, the Company repurchased 2,745,990 common shares pursuant to the NCIB in effect during that period at an aggregate cost of $ 305,640 .

During the nine months ended September 30, 2020, the Company repurchased 1,271,977 common shares pursuant to the NCIB at an aggregate cost of $ 105,654 .

As of September 30, 2021, the remaining maximum number of shares available for repurchase under the current NCIB was 13,025,895 .

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

For the three months ended March 31, 2022, the Company repurchased 3,388,155 common shares pursuant to the NCIB in effect during that period at an aggregate cost of $ 424,999 .

During the three months ended March 31, 2021, the Company repurchased 666,184 common shares pursuant to the NCIB at an aggregate cost of $ 65,999 .

As of March 31, 2022, the remaining maximum number of shares available for repurchase under the current NCIB was 9,379,908 .

Cash Dividend

In October 2021, the Company announced that its Board of Directors increased its regular quarterly cash dividend by $ 0.025 , from $ 0.205 to $ 0.23 per Company common share.

Cash dividends of $ 160,754 and $ 145,921 were paid during the nine months ended September 30, 2021 and 2020, respectively.

Cash dividends of $ 59,391 and $ 53,909 were paid during the three months ended March 31, 2022 and 2021, respectively.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

In addition, the Company is a party to various claims and suits pending for alleged damages to persons and property, alleged violations of certain laws and alleged liabilities arising out of matters occurring during the normal operation of the Company’s business.

Except as noted in the matters described below, as of September 30, 2021, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse effect on its business, financial condition, results of operations or cash flows.

Except as noted in the matters described below, as of March 31, 2022, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse effect on its business, financial condition, results of operations or cash flows.

Lower Duwamish Waterway Superfund Site Allocation Process

2 unchanged sentences

Environmental Protection Agency, Region 10 (the “EPA”) as a potentially responsible party (“PRP”), along with more than 100 others, under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or the “Superfund” law) with respect to the Lower Duwamish Waterway Superfund Site (the “LDW Site”).

Listed on the

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

National Priorities List in 2001, the LDW Site is a five-mile stretch of the Duwamish River flowing into Elliott Bay in Seattle, Washington.

Listed on the National Priorities List in 2001, the LDW Site is a five-mile stretch of the Duwamish River flowing into Elliott Bay in Seattle, Washington.

A group of PRPs known as the Lower Duwamish Working Group (“LDWG”) and consisting of the City of Seattle, King County, the Port of Seattle, and Boeing Company conducted a Remedial Investigation/Feasibility Study for the LDW Site.

3 unchanged sentences

The ROD also requires ten years of monitoring following the clean-up, and provides that if clean-up goals have not been met by the end of this period, then additional clean-up activities, at additional cost, may be required at that time.

Implementation of the clean-up will not begin until after the ongoing Early Action Area (“EAA”) clean-ups have been completed.

Typically, costs for monitoring may be in addition to those expended for the clean-up.

While three of the EAA clean-ups have been completed to date, some work remains to be done on three other EAAs.

Implementation of the clean-up also must await additional baseline sampling throughout the LDW Site and the preparation of a remedial design for performing the clean-up.

On April 27, 2016, the LDWG entered into a third amendment of its Administrative Order on Consent with the EPA (the “AOC 3”) in which it agreed to perform the additional baseline sediment sampling and certain technical studies needed to prepare the actual remedial design.

Implementation of the clean-up must await additional baseline sampling throughout the LDW Site and the preparation of a remedial design for performing the clean-up.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

prepare the actual remedial design.

The LDWG and the EPA entered into a fourth amendment to the AOC in July 2018 primarily addressing development of a proposed remedy for the upper reach of the LDW Site, river mile 3 to river mile 5.

7 unchanged sentences

The allocator issued his preliminary allocation report on June 28, 2021.

The final allocation report will be issued only after the allocator considers comments of the parties on the preliminary report.

The allocator is currently considering comments on the preliminary report, which the parties submitted in November 2021.

The allocator may issue the final allocation report sometime in the next few weeks.

In July 2021, the EPA was informed of the issuance of the preliminary allocation report in a telephone conference with allocation participants.

In that call, the EPA reiterated its expectation that settlement negotiations would begin in 2022.

In a telephone conference with allocation participants on December 14, 2021, the EPA stated its expectation that settlement negotiations would begin in the second half of 2022.

NWCS is defending itself vigorously in this confidential allocation process.

8 unchanged sentences

Damages to natural resources are in addition to clean-up costs.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

an Assessment Plan and the performance of a Natural Resources Damages Assessment (“NRDA”) in accordance with the Assessment Plan for both the LDW Site and the east and west waterways of the Harbor Island site.

The Letter, versions of which NWCS believes were sent to all or a group of the PRPs for the LDW Site, also notified its recipients of their opportunity to participate in the Trustees’ development of an Assessment Plan and the performance of a Natural Resources Damages Assessment (“NRDA”) in accordance with the Assessment Plan for both the LDW Site and the east and west waterways of the Harbor Island site.

NWCS timely responded with correspondence to the NOAA Office of General Counsel, in which it declined the invitation at that time.

4 unchanged sentences

At this point, the Company is not able to determine the likelihood or amount of an assessment of natural resource damages against NWCS in connection with this matter.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Los Angeles County, California Landfill Expansion Litigation

1 unchanged sentence

In October 2004, the Company’s subsidiary, Chiquita Canyon, LLC (“CCL”), then under prior ownership, filed an application (the “Application”) with the County of Los Angeles (the “County”) Department of Regional Planning (“DRP”) for a conditional use permit (the “CUP”) to authorize the continued operation and expansion of the Chiquita Canyon Landfill (the “Landfill”).

The Landfill has operated since 1972, and as a regional landfill, accepted over two million tons of materials for disposal and beneficial use in 2020.

The Landfill has operated since 1972, and as a regional landfill, accepted approximately two and a half million tons of materials for disposal and beneficial use in 2021.

The Application requested expansion of the existing waste footprint on CCL’s contiguous property, an increase in maximum elevation, creation of a new entrance and new support facilities, construction of a facility for the County or another third-party operator to host household hazardous waste collection events, designation of an area for mixed organics/composting, and other modifications.

11 unchanged sentences

(a) an injunction and writ of mandate against certain of the CUP’s operational restrictions, taxes and fees, (b) a declaration that the challenged conditions are unconstitutional and in violation of state and federal statutes, (c) reimbursement for any such illegal fees paid under protest, (d) damages, (e) an award of just compensation for a taking, (f) attorney fees, and (g) all other appropriate legal and equitable relief.

Extensive motions practice and an interlocutory appeal occurred in 2018 and 2019 over the permissible scope of CCL’s challenge to the CUP, specifically 13 operational conditions in the CUP.

The Superior Court ruled in CCL’s favor on November 13, 2019, finding that the County was estopped from contending that CCL has waived its rights to challenge the legality of the 13 operational conditions.

The County sought interlocutory review of the Superior Court’s decision in the Court of Appeal, which denied the County’s petition on February 7, 2020.

Following full briefing and oral argument on June 22, 2020 on six of CCL’s causes of action, the Superior Court issued its decision on July 2, 2020, granting CCL’s petition for writ of mandate in part and denying it in part.

Following extensive litigation in 2018 and 2019 on the permissible scope of CCL’s challenge, full briefing occurred on June 22, 2020 on six of CCL’s causes of action, and the Superior Court issued its decision on July 2, 2020, granting CCL’s petition for writ of mandate in part and denying it in part.

CCL prevailed with respect to 12 of the challenged conditions, many of which imposed new fees and exactions on the Landfill.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

entry of final judgment, the Superior Court will hear CCL’s remaining causes of action.

Before entry of final judgment, the Superior Court will hear CCL’s remaining causes of action.

A trial on CCL’s remaining causes of action is scheduled for August 1, 2022.

7 unchanged sentences

The alleged B&T fee was ostensibly to fund the construction of transportation infrastructure in the area of the Landfill.

At the time the NOV was issued, CCL had already contested the legality of the B&T fee in the October 20, 2017 Complaint filed against the County in Los Angeles County Superior Court, described above under paragraph A (the “CUP lawsuit”).

At the time the NOV was issued, CCL had

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

already contested the legality of the B&T fee in the October 20, 2017 Complaint filed against the County in Los Angeles County Superior Court, described above under paragraph A (the “CUP lawsuit”).

On January 12, 2018, CCL filed an appeal of the alleged violations in the NOV.

7 unchanged sentences

The NOV case has been continued multiple times as the CUP lawsuit was adjudicated;

it is now set for trial on January 18, 2022.

it is now set for trial on December 13, 2022.

The Superior Court’s July 2, 2020 decision in the CUP lawsuit upheld the B&T fee against a Mitigation Fee Act challenge, and addressed two other conditions that were also the subject of the NOV, which may impact the scope of the B&T fee/NOV case.

2 unchanged sentences

SUBSEQUENT EVENTS

On October 27, 2021 , the Company announced that its Board of Directors increased its regular quarterly cash dividend by $ 0.025 , from 0.205 to $ 0.23 per Company common share, and then declared a regular quarterly cash dividend of $ 0.23 per Company common share.

The dividend will be paid on November 23, 2021 , to shareholders of record on the close of business on November 9, 2021 .

On May 3, 2022 , the Company announced that its Board of Directors approved a regular quarterly cash dividend of $ 0.23 per Company common share.

The dividend will be paid on June 1, 2022 , to shareholders of record on the close of business on May 18, 2022 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements